Also in this letter:
■ Delivery workers’ strike hits Zomato, Swiggy ops
■ Razorpay tapping users with new offerings
■ Gaming influencers mint money amid high ad spends
Ecommerce discounts shrink on day three on 30% surge in festive sales
Customers seeking good online deals during the ongoing festive season sales could be a little disappointed as ecommerce discounts and promotional offers came down on the third day. This is due to brands overachieving their targets.
Surge in sales: Brands and online sellers over achieved their targets reporting an over 25-30% surge in sales by value compared to the same period last year. This spike was observed despite Shradh, which is considered an inauspicious shopping period, according to the Hindu calendar, in several parts of the country.
How’s it going? Online-focused brands grew sales of the premium segment more than entry to mid-level categories. On the opening day, Myntra recorded over 100% growth in demand for categories like beauty, personal care and jewellery.
Samsung and Xiaomi sold record numbers of televisions and smartphones with steep discounts on several premium models, while Flipkart sold over 4 lakh units of Apple’s iPhone, industry executives said.
Quote, unquote: Myntra’s head of revenue and growth, Neha Wali, said it drew very strong demand from both metros and non-metros, with day 1 of the sale seeing millions of customers thronging the platform. “The geographical diversity was evident, with approximately 45% of orders coming from Tier 2 & 3 cities and beyond,” she said.
Catch-up quick: ET reported on September 27 that online discounts were expected to be raining down during the sales as several ecommerce majors looked to expand volumes, with discounts going up to as much as 60% in some categories.
Also read | Festive season may see sales growth of 18-20% to $11 billion: report
Dunzo board, investors vet key costs to keep cash flow in check
Cash flow at Dunzo is being closely monitored by the board and key investors of the troubled quick commerce firm who are reviewing all key expenses before clearing any significant payments or making new commitments.
Under the lens: While a startup typically shares its management information system with investors on a monthly-to-quarterly basis, the ongoing crises at the firm regarding cash flow, pending dues to vendors and delayed staff salaries have prompted closer monitoring of the remaining funds to ensure the crisis doesn’t widen further.
Repayment issues: “Yes, there is a review before any material payments from the company to vendors or any general corporate purposes,” a source told ET, adding that’s one of the key reasons why the firm is focussed on closing its effort to raise new capital.
T&C on new capital: ET reported on October 4 that a group of Duzo’s investors have committed new capital to the firm, but at a fourth of its last valuation of $800 million. The firm is currently seeking approval from the board and investors to float a rights issue.
Also read | ETtech Recap: Decoding Dunzo’s deepening crisis in five stories
Gaming influencers in big league as companies hike spends by 35%
The festive season in India has brought big money for gaming influencers. Thanks to the growing popularity of these online ‘mini-celebrities’, they are making the most of ad spends by ecommerce and retail brands, which have shot up by 22-35%.
Companies dole out cash: Amazon and Flipkart are dolling out deals anywhere between Rs 20,000-Rs 8,00,000 for influencers to create sponsored content around deals and offers on gaming gear by firms such as Acer, Lenovo, Intel etc during their ‘Great Indian Festival’ and ‘Big Billion Days’ sales which got underway last weekend.
Meanwhile, offline long-format retailers like Croma, Bajaj Electronics and Vijay Sales have included gaming creators into their prime marketing strategies. They are sponsoring carnivals to capitalise on these influencers’ ability to physically gather crowds.
Impact: “We have already witnessed a business of Rs 10-12 lakh flowing in from ecommerce promotions in the first week alone, which is 22-25% higher than previous year,” Rohit Agarwal, founder and director of marketing agency Alpha Zegus, told ET.
Brand managers believe gaming influencer marketing is slated to collect Rs 1.5-2 crore in the next 45 days, followed by tournament sponsorships which could gather Rs 70-80 lakh.
Swiggy, Zomato delivery workers strike in Mumbai, ops hit
While one delivery company faces cash troubles, two others — Swiggy and Zomato — saw operations being hit in many parts of the country’s financial capital after delivery workers went on a strike on Sunday.
Driving the news: The delivery workers have put forward a plethora of demands, including better distribution of orders and workloads, optimisation of pickup and drop distances, comprehensive insurance coverage for workers and their families, and equitable access to incentive programmes.
Tell me more: Thousands of delivery workers from Swiggy and Zomato joined the strikes, organised collectively by multiple organisations, including the Shiv Sena-affiliated Rashtriya Karmachari Sena and the Indian Federation of App-based Transport Workers (IFATW), among others.
Also read | Swiggy tests bundling for ‘One’ subscriptions, experiments with pricing tiers
From the ground: “We know of about 3,500 delivery partners whose IDs have been deactivated by platforms, not just in Swiggy and Zomato but across platforms, due to a variety of reasons that were beyond their control, like bad weather or packaging issues or wrong location. This kind of deactivation without verification or bargaining is very harmful for workers,” Shaik Salauddin, national general secretary of IFATW, told ET.
Also read | Swiggy rolls out ‘Lite’ plan, bundling for One programme to take on Zomato Gold
Razorpay leans on existing customers on signup freeze
After being barred from onboarding new customers by the Reserve Bank of India, digital payments company Razorpay is now trying to generate more business out of its existing customers with new product lines, as it tweaks its go-to-market strategy
New launch: The company has introduced its newest offering, Optimizer, designed to empower businesses dealing with substantial transaction volumes. This solution enables them to prevent transaction failures and swiftly redirect transactions in real-time. By integrating with the payment rerouting solution, businesses will also get access to different bank PGs, through one-single integration.
Shift in strategy: Razorpay’s chief business officer Rahul Kothari told ET that the company’s overall revenue from new customers has shrunk to 12-15% from an earlier 30%, signaling a shift in its go-to-market strategy towards tapping its existing base.
India market to turn largest for Zoho in 10 years: Sridhar Vembu
India will become the largest market for SaaS firm Zoho Corporation in a decade, driven by the country’s sheer growth and demographic dividend, said Sridhar Vembu, founder and CEO of the Chennai-based firm.
Numero uno: “It is just growth rates. With a large economy and its potential, India has to be the number one market for everyone in the world in the next 20 years. It will happen sooner for us because we are based here. I’m sure even if you take Microsoft or Google, (even) they are planning for India to be their number one market,” said Vembu, in response to ET’s question on Monday.
Yes, but: Last week, Vembu took to social media platform X (formerly Twitter) to warn that the global economy was likely taking a turn for the worse, and urged companies to exercise caution. He also said Zoho has seen a slowdown in growth across geographies and products in September.
Other Top Stories By Our Reporters
India core market, key for product design: YouTube CBO Mary Ellen Coe | India is a large and important market for YouTube and the company houses a large base of product teams in the country to build and develop its latest suite of products, chief business officer Mary Ellen Coe told ET.
Zepto aims for Rs 10,000-crore sales in coming months: CEO Aadit Palicha | The 2021-founded startup is also looking to turn profitable in the next 10-12 months and go public thereafter, Palicha said. If it does manage to do so, Zepto will become one of the youngest domestic companies in the space to have gone public within five years of launch.
Global Picks We Are Reading
■ Nevada lithium mine leads to ‘green colonialism’ accusations (BBC)
■ Disney’s Loki faces backlash over reported use of generative AI (The Verge)
■ A primer on Elon Musk’s latest dumb fight with the SEC (Financial Times)
